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Why Shopify Stock Jumped on Monday

By Daniel Sparks – Aug 3, 2020 at 3:38PM

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This monster growth stock is rising sharply again.

What happened

Shares of Shopify (SHOP 0.05%) jumped on Monday, rising more than 6% as of 2:50 p.m. EDT.

The stock's gain likely reflects both broader-market bullish trends on Monday and exceptional strength in growth stocks like Shopify.

Shopify e-commerce platform on a smartphone, laptop, and tablet.

Image source: Shopify.https://cdn.shopify.com/assets2/press/resources/photo-desk-56cfc3d26b55289a7b02f5e8b6f1d63b89565ff615e8ac4bf883ed19f8cb1bce.jpg

So what

The stock's gain on Monday adds to the significant volatility the e-commerce platform specialist's shares have seen following its second-quarter earnings release on July 29.

The stock initially soared to a new all-time high after the report was released. Revenue that nearly doubled year over year impressed investors. But the stock took a breather in the following days. Now shares are jumping again as investors continue to digest the incredible second-quarter results.

Of course, the main driver for Shopify stock's sharp rise on Monday is likely broader-market optimism. The S&P 500 was up 0.9% intraday as of this writing. Further, many growth stocks were up several percentage points or more.

Now what

Due to the ongoing uncertainty in the economy, Shopify didn't provide guidance when it announced its second-quarter results late last month. But expectations are high. Analysts, on average, expect Shopify's total 2020 revenue to rise 62% over 2019. 

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Shopify. The Motley Fool has a disclosure policy.

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